Asian indices trade mixed as US Fed remains undecided on timing of next rate increase

Barring the Nikkei and the S&P/ASX 200, indices in the rest of Asia traded higher on Thursday (18 August). The Shanghai Composite was up 0.44% at 3,123.33 as of 5.05am GMT, amid the US Fed's cautious outlook on raising interest rates.

The July meeting minutes of the US central bank, released on 17 August, showed that Fed officials were positive about the US economic outlook and the labour market. However, on increasing interest rates, they wanted to keep their options open.

While some wanted to increase interest rates, others were seeking more information before taking a call. Some argued that a slowdown in hiring would not allow for increasing rates in the near-term.

"There is clearly strong disagreement within the Fed with regards to the timing of further rate hikes," Angus Nicholson, market analyst at IG in Melbourne, was quoted as saying by Reuters.

This was seen as a positive sign by market participants to take part in some risk-buying. A decline in futures contracts further showed that there were fewer people expecting a near-term increase in US interest rates.

The Asian index that took the biggest hit was the Nikkei amid data showing that the country's exports declined 14% on-year in July. While this was the biggest fall in seven years, it was in line with expectations. Japan's imports for the month too had declined by 24.7%, more than the 20.6% decline that Reuters had forecast.

Indices in the rest of Asia were trading as follows at 5:36am GMT

Overnight (17 August), the Dow Jones Industrial Average closed at 18,573.94, up 0.12%, while the FTSE 100 closed at 6,859.15, down 0.50%.

Among commodities, oil prices declined amid the possibility of a record Saudi output. While WTI crude oil was trading lower by 0.04% at $46.77 (£35.81) a barrel, Brent crude was trading 0.44% lower at $49.63 a barrel as of 6am GMT.